The Department of Justice backed off no-poach challenges in franchise agreements in 2019, but the state doubled down. The result? Washington state challenged a raft of no-poach/no-hire provisions in 225 franchise systems, resulting in agreements requiring franchisors to agree not to enforce the offending provisions not just in Washington but nationwide. On April 28, 2020
FDD Item 19 Financial Performance Representations in the Age of COVID-19
With most non-essential businesses closed across the country, it is easy to forget we are two weeks away from the April 30th Franchise Disclosure Document (FDD) update deadline for franchisors with a calendar fiscal year end. Some franchise systems are delaying the preparation and issuance of an updated 2020 FDD and corresponding state renewal registrations.
NJFPA Refresher – Community of Interest
As many readers may know, the FTC Rule on Franchising’s definition of franchise contains three basic definitional elements: (1) license of a trademark, (2) payment of a fee, and (3) provision of assistance or exertion of control. Additionally, twenty-six states regulate the offer and sale of franchises. Of those twenty-six states, eight define a franchise
How Do You Determine Your Franchise System’s Technology Fee?
In my recent experience, most franchise start-ups and emerging systems typically charge a technology fee or, at a minimum, reserve the right to charge a technology fee in the future. These fees are easily justifiable. Franchisors are routinely creating, developing, managing, and upgrading software programs, websites, phone systems, online platforms and similar technology solutions used
No-Poach and Antitrust, Part Deux (Or, is the risk worth it?)
In a recent post, I expressed the view that no-poach clauses in franchise agreements are unlikely to violate the antitrust laws. Recent activity, however, has given me a “maybe yes, maybe no” on my prediction.
First, two recent rulings offer differing views on the issue of the appropriate standard to apply to the antitrust
Online Reviews – Best Practices for Dealing with Yelp from Yelp!
The Pennsylvania Restaurant and Lodging Association provides many benefits to its hospitality industry members. One of those benefits is access to its interesting and useful webinar series. This month’s webinar “Five Star State of Mind: Handling Online Reviews” was presented by Ali Schwartz of Yelp. Unlike Yelp’s sales team, Ali is a
No-Poach Provision: The Latest Cause of Worry to Franchise Systems
The recent antitrust attacks on no-poach clauses encourage insomnia among franchise lawyers. But is the attack serious or just a flash in the pan, soon to be extinguished?
The insomnia began in the tech industry, where front-line players with huge market shares agreed not to poach each other’s employees. No-poach agreements among dominant market players,
Examining Franchise “Influencers” – Who is Driving that Franchise Sale?
Mark Siebert, CEO of the well-known franchising consulting firm iFranchise Group, authored a very interesting article in a recent issue of Franchise Times magazine about “influencers” in franchise sales. As a corporate and regulatory transactional franchise attorney, I represent both franchisors (in the sale) and franchisees, multi-unit owners and area developers (in the purchase)
Did You Know? NASAA Releases New Instructions
On May 19, 2019, the North American Securities Administrators Association (NASAA) adopted new state cover sheets and state effective dates page for franchise disclosure documents. Beginning on January 1, 2020, the FDD must now include three specific cover sheets prepared in accordance with the instructions and samples promulgated by NASAA.
All of these new pages
Just Signed! New Washington State Law Limits Use of Non-Competes and No-Poach Agreements
Yesterday, Washington’s Governor, Jay Inslee signed HB1450 [PDF] which targets the use of restrictive covenants in the State of Washington (the “Non-Compete Act”). The signing of the Non-Compete Act follows the recent settlement on March 18, 2019 of three cases filed by private plaintiffs challenging the no-poaching provisions in franchise agreements of Auntie Anne’s, Arby’s